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Is Arconic (ARNC) a Great Value Stock Right Now?

Zacks Equity Research
Popular (BPOP) delivered earnings and revenue surprises of 16.55% and 0.61%, respectively, for the quarter ended March 2019. Do the numbers hold clues to what lies ahead for the stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Arconic (ARNC). ARNC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11.17, which compares to its industry's average of 15.56. Over the last 12 months, ARNC's Forward P/E has been as high as 16 and as low as 10.10, with a median of 13.22.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARNC has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.07.

These are only a few of the key metrics included in Arconic's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ARNC looks like an impressive value stock at the moment.


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